Landcorp back in the black as valuations swing in its favour
Aug. 31 (BusinessDesk) - Landcorp Farming reported a full-year profit as the state-owned farmer recog-nised a jump in the value of livestock and benefited from strong market prices.
Profit was $51.9 million in the year ended June 30, more than four times the $11.5 million it earned a year earlier. Revenue rose 11 percent to $233.5 million while expenses rose 3.3 percent, which included costs related to the end of its sharemilking contract with Shanghai Pengxin, the company said.
The results include a $20 million increase in the value of livestock, "reflecting strong market prices" while the year-earlier result carried an unrealised loss of $24.8 million on land and improvements. The operating profit in the latest year was about $5.7 million, within its guidance range of between $2 million and $7 million, from a year-earlier loss of $9.4 million.
Revenue from milk rose 35 percent as payments from milk processors such as Fonterra Cooperative Group "sharply rebounded from their lowest level in 10 years," Landcorp said.
“It’s encouraging that our results have turned around to this extent,” said chief executive Steven Carden. “We’ve strengthened the core business, improving our farming systems, while continuing to expand our range of partnerships and Pāmu products,” he said, referring to the company's new brand.
Landcorp said it produced 19.5 million kilograms of milk solids, including a contribution from sharemilk-ing, in the year, up from 18.8 million kg/MS in 2016. Wool revenue fell with prices, it said without giving details.
The company didn't declare a dividend in line with its policy of repaying debt, it said. Debt fell to $206.9 million from $219.6 million.
Landcorp was created out of the Department of Lands and Survey in 1987 and farms 140 properties, producing sheep, beef, venison, milk, deer velvet, and wool.